Traditionally, a person in need to find the highest return for his financial asset such as cash or shares will be faced with a number of difficult choices where he/she is faced with many offerings being maintained in accordance to a fix number of pre-determined criteria. He/she is asked to search a number of banking sites in order to find the best rates/offerings. While it is not difficult to see the depositing requirements for cash in the form of a fixed deposits or quick 24 hours rate, this invention also includes other type of financial assets such as shares which can be temporarily “lend” or deposited to a borrower in return for some interest cost. Share lending may not be well-known outside of the financial circle but it is widely practise since one of the criteria for shorting a market is to have shares-on-hand. Speculators who “short” a market do not have shares to begin with and if a market should go against them, they may have to resort to buying these shares back (which can be expensive) or temporary “borrow” them in the belief that the “rental” cost is less than the profits earned when the market does fall.
The current situation allows for prospective depositors to do manual search in accordance to his risk/return requirements and the credit risk of the Institution that provides such a facility. This invention improves on this by providing a discovery method using auction and includes a method where such financial institution or borrowers are checked for their credit suitability prior to allowing them to participate. While there are major portal such as Yahoo! and others that provide independent links to the such enabling institutions, they rarely help in determining the best deal. A search engine is only as good as the information provided for it to functions. Beyond that, it does not have the capabilities to capture risk/return values perceived by others. It can only provide the information but not the analysis. This Invention uses the auction method as an alternative to discovering a better result and hopefully the underlying analysis is reflected as well in regards to a particular risk/return requirement.
In this traditional way of looking for a good deal, the choice of using a search engine is rather limited—they are generally localised to the data captured by the database. Moreover, in order to compare different borrowers, the depositor needs to individually contact each one to determine their suitability in accordance to his risk/return preferences. There may be some straight vanilla offerings such as fixed term interest rate or a combination of fixed and floating or negotiable rates which the depositor must individually seek out.
The drawbacks for obtaining a suitable return through an agency or search portal is that (1) a limitation to data captured on the database be in on the Internet or from papers; (2) searching service is very time consuming and consequently expensive; (3) dealing with a regular agency is limited to regular business hours and they may not be independent; and (4) quality of borrowers varies and depositors usually are not able to ascertain their qualities.
It is therefore an object of the present invention to provide a system for conducting an electronic financial asset depositing auction wherein a prospective lender/depositor's requirements and contacts are auctioned off to a large number of potential borrower to get or discover the best rate within the shortest possible time;
It is an another object of the present invention to include financial assets such as shares in such a lending; and
It is a further object of the present invention that such financial asset depositing auction be conducted by using a computer network or networks, such as the Internet, which is accessible to a great number of prospective borrowers, as well as a great number of lenders.